Google Books was found by the court to be 'transformative' for authors – leading to increased sales of their work. Photograph: Beck Diefenbach/Reuters

A New York court has dismissed a lawsuit against Google by authors who accused the internet giant of digitally copying millions of books for an online library without permission.

US circuit judge Denny Chin, in Manhattan, accepted Google's argument that its scanning of more than 20m books, and making snippets of text available for online searches, constituted fair use under US copyright law.

But the judge said the massive library makes it easier for students, teachers, researchers and the public to find books, while maintaining "respectful consideration" for authors' rights. He also said the digitisation was "transformative," and could be expected to boost rather than reduce book sales.

The case was filed by The Authors Guild, an association of writers led by bestselling thriller writer Scott Turow. The named plaintiffs in the motion were authors Betty Miles, Joseph Goulden and Jim Bouton, the former New York Yankees pitcher.

In March 2011, Chin rejected a $125m settlement, saying it raised copyright and antitrust issues by giving Google a "de facto monopoly" to copy books en masse. The publishers eventually settled in October 2012.

In July, the second US circuit court of appeals found that Chin had prematurely certified a class of authors without first evaluating the fair use defence. Chin oversaw the case as a trial judge, and kept jurisdiction after joining the second Circuit.